THE value of the pound has jumped against both the dollar and the euro today following the Prime Minister's cabinet reshuffle.
Sterling rose from 1.1921 against the euro at the opening of the market today to 1.2007 at the time of writing at 1.30pm.
Meanwhile, the dollar has increased from 1.2955 first thing this morning to 1.3039 now.
This isn't a huge jump but does mean your £1 will get you slightly more for your money in the US and Europe.
According to foreign exchange firm Caxton, this is a one-week high for the pound against the dollar, and the highest the pound has been against the euro since December 2019.
The movement follows a cabinet reshuffle by Boris Johnson that's seen chancellor Sajid Javid quit because he refused to replace his advisors with those of No. 10's.
He was quickly replaced by Rishi Sunak – an up and coming member of the Treasury.
Meanwhile Northern Ireland secretary Julian Smith, business secretary Andrea Leadsom, housing minister Esther McVey, environment secretary Theresa Villiers, and attorney-general Geoffrey Cox have all been fired.
As have transport minister Nusrat Ghani, Chris Skidmore from education, and George Freeman out of transport.
But the Prime Minister has promoted a string of women to junior roles.
Michael Brown, senior market analyst at Caxton said: "The surprising resignation of Sajid Javid as Chancellor, and his replacement by Rishi Sunak, implies that Number 10 will now exert greater influence over the Treasury.
"This has led markets to believe that more expansionary fiscal policies – including increased infrastructure spending – are likely to be delivered in next month’s budget.
"Sterling has strengthened accordingly, rallying above $1.30 to a one-week high against the dollar, and breaking through the key €1.20 mark."
But despite Sterling's boost, it's still a long way off its June 2016 pre-referendum levels.
Back then, the value of the pound against the euro was 1.2719, while it stood at 1.588 against the dollar.
How to get the cheapest holiday cash
WE spoke to comparison site Money.co.uk to find out how you can guarantee the best rate when you go on holiday
- Don’t buy cash at the airport – You’ll always be able to beat the rate with a bit of forward planning.
- Compare travel money companies online – Factor in delivery costs and choose the option that gives you the most cash to spend on holiday. If you’ve left it until the last minute order online for airport collection so you get the best of both worlds.
- Use comparison tools – MoneySavingExpert’s TravelMoneyMax enables you to compare pick-up and pre-order rates.
- Don’t pay for travel money with a credit card – It’s likely you’ll be charged a cash withdrawal fee which adds to the cost.
- Top up a prepaid card to lock in your rate now – Choose your card and read the T&Cs carefully as some apply hefty fees.
- Always choose to pay in the local currency rather than sterling – This will help you avoid sneaky exchange fees.
The pound also strengthened against the dollar and the euro when Britain finally exited the European Union on January 31, 2020.
It also rose back in December 2019 when MPs headed back to parliament following Mr Johnson's general election win.
But no-one can predict exactly how it will fluctuate again in future in these uncertain political times.
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